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Chapter 13 Trustee Laws

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What Is a Chapter 13 Trustee?

When filing for bankruptcy, a trustee may sometimes be needed to perform certain tasks. A trustee is a neutral third party actor who is designated to perform tasks, usually on behalf of the creditor. This party is usually an individual and may be appointed by either the creditors or by the U.S. Department of Justice. This helps to ensure that the funds are handled in a responsible and neutral manner.

What Tasks Does a Chapter 13 Bankruptcy Trustee Perform?

Chapter 13 bankruptcy involves a restructuring of the debtor’s finances so that they will be able to begin paying back creditors. Thus, much of the Chapter 13 trustee’s tasks involve the restructuring of the person’s finances. Some of their tasks include:

  • Reviewing the debtor’s overall financial plan and repayment structure
  • Receiving payments from the debtor
  • Distributing the payments to creditors in a proportional manner
  • Acting as a mediator or negotiator between the two parties
  • Overseeing financial meetings
  • Reviewing any creditor claims and searching for any improper or illegal requests

Thus, the trustee helps to uphold bankruptcy laws and standards. They often notify the courts if either party has committed fraud or other violations.

What If I Have a Dispute with the Bankruptcy Trustee?

As with any other trustee arrangement, the bankruptcy trustee must follow certain legal standards. This is especially true when it comes to their handling of finances and when making important financial decisions. For instance, bankruptcy trustees are not allowed to mingle the debtor’s payments with their own personal bank accounts. Also, they are not to disclose any private information of the any of the parties involved without their consent.

A violation of trustee duties can lead to further legal claims. A common lawsuit is where the debtor sues the trustee because their mishandling of finances led to financial losses. In such cases, the debtor may receive a damages award which will reimburse them for losses.

Do I Need a Lawyer for Help with Chapter 13 Trustee Laws?

Bankruptcy trustees are held to very specific standards which govern their duties and responsibilities. You may need to hire a lawyer if you need help when it comes to bankruptcy and trustee laws. Your attorney can inform you of your legal rights during the bankruptcy process. Also, if you need to file additional legal claims, your attorney will be able to provide you with the guidance that you need to help resolve the situation.

Photo of page author Jose Rivera

, LegalMatch Legal Writer

Last Modified: 02-20-2014 03:20 PM PST

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